Illinois AG opposes ComEd, Peoples Gas rate hikes

Illinois Attorney General Lisa Madigan is picking fights with ComEd and Peoples Gas in an effort to block rate increases.

Seeking to reduce a requested $128 million gas rate hike by $74 million, Madigan filed a report Wednesday with the Illinois Commerce Commission (ICC) that contains expert testimony arguing that Peoples Gas, when compared to 18 other Midwest gas companies, is wrought with inefficiencies. Its operation and maintenance costs are estimated to be 140 percent higher than the average, while administrative and general costs were 155 percent higher, according to a study done by David Dismukes, a consulting economist and college professor.

In a statement, Madigan said “It’s disappointing that Peoples Gas rates are higher than any other natural gas provider in the Midwest, and it’s shocking that they are asking for even more money from ratepayers.”

The commission will decide on the rate increase by next February.

Peoples Gas spokeswoman Jennifer Block said Wednesday that comparing the gas company to other regional gas companies is not an apples-to-apples comparison.

“Peoples Gas first of all operates in an urban environment, which is incredibly complex versus operating in a more rural environment,” she said. Block noted that the city’s aging infrastructure requires unique updates, including replacing old gas pipes, inspecting more than 720,000 gas meters about every three years that are located inside buildings, as well as an ongoing process of moving them all outdoor.

“There’s a cost associated with modernizing,” she said.

The other bout on Madigan’s utility fight card: ComEd.

She thinks electrical provider’s plan to put $87 million in employee bonuses on the backs of its customers is illegal. The figure is part of a $275 million rate hike the company is seeking. On Tuesday Madigan submitted a filing with the ICC seeking to block the plan.

In her filing, Madigan argues that Illinois bars “incentive compensation expense that is based on net income or an affiliate’s earnings per share” through rate increases.

A statement from ComEd released Tuesday said “ComEd’s incentive program is specifically designed to comply” with state statute. If approved, the rate increase would begin in 2015. In total, Madigan is seeking to slash the rate increase by $106 million, or 39 percent.